I would completely stop investing in gold and silver. I don’t invest any money in precious metals at all because they have a lousy long-term track record. Dave Ramsey is CEO of Ramsey Solutions. Every time you analyze an investment (real estate or stocks), you should look at the track record of what it has done in the past over a long period of time.
That gives you an idea of what it’s going to do in the future. And if you look at the price of gold, its value is based solely on emotions. When people are afraid that the economy will collapse, they run off to invest in gold because they believe they are financially secure. But that’s a myth, because when an economy collapses, people return to the bartering system.
And as Dave says: “Since the Roman Empire, gold has never been used as a medium of exchange for a collapsed economy. According to Ramsey, gold and silver prices are unstable, but the better word here is volatile. The prices of precious metals can be volatile, as can the prices of stocks and other asset classes. The volatility of asset prices is normal and actually offers the opportunity to profit from these price fluctuations.
Volatility is an opportunity for investors to buy precious metals at a cheaper price and sell them for a profit later when their prices rise. This was done to control inflation and prevent international governments from recovering more dollars for gold. And some people still do that, but instead of burying gold bars in their backyard, they buy stocks or investment funds that invest in gold. But in 1933, it fell away from the gold standard under President Roosevelt, who suspended the gold standard.
Gold and silver prices are so unstable (and have been over time) that in an economic crisis, they would only be useful to hope that someone will take your silver coins or watch and exchange a pack of toilet paper or a can of gas in return. Just like holding a dollar bill in your hand, you have the security of knowing that you can actually have your investment in the form of gold bars or silver coins in your hand (or in your safe). I don’t mean to sound like a broken record here, but just like gold and silver, platinum isn’t the investment you’re looking for. The dollar could not be converted into gold since President Richard Nixon ended the practice in 1971. [1] Before that, people bought gold bars to diversify their investment portfolio and protect themselves from inflation.
But over time, as their value rises, gold and silver investments are usually appropriate long-term hedges against inflation. When you think of the world’s obsession with gold, it’s easy to get caught up in adventures and mysteries such as panning for gold during the gold rush, pirate ships, and treasure maps. For example, it is known that the price of silver is more volatile than that of gold, as the silver market is smaller than that of gold. Unless you want to get into jewelry making, investing your hard-earned money in precious metals like gold, silver, and platinum isn’t the best use of your money.
It’s not often that you can bring a bag of gold chains to the gas station and exchange it for a full tank of gas. When the world seems to be going crazy and the news cycle is filled with a constant stream of bad news, you may be tempted to make some stupid financial decisions, such as doing everything you can about a “better barter system” based on commodities like gold or silver.